The most common car insurance scams

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Did you know that some £27 million is paid out by the UK car insurance industry to motorists with regards to vehicle repairs and the covering of injury claims EVERY SINGLE DAY?

Just one look at this astonishing figure alone makes you understand why the more unscrupulous individual might see this as an ideal opportunity to make some ill-gotten financial gains by attempting to defraud insurance policy providers. Which is precisely what’s been happening now for quite a while, and is a recognized problem which essentially costs the motor insurance sector upwards of £1 billion a year.

The ways in which duplicitous motorists attempt to outwit the insurance companies is as innovative as it is varied, and routinely includes such nefarious practices as ‘crash for cash’, fake whiplash claims and fake car theft to cite but three of the firm favourites currently in circulation.

Here we take a quick look at the most common motor insurance scams which are practised (and we’re sad to report, seemingly perfected) by rogue motorists at any one time, despite the best interests of car insurance policy providers, the police, motoring organisations and various other authorities whose job it is to track and investigate such crimes.

In no particular order, the following is a list of the most prolific means of attempting to defraud car insurers as practiced by both opportunistic individuals and organised crime syndicates in 2016.

With the government recently announcing plans for further crackdowns on devious motorists, we’d hope the landscape will change for the better sooner rather than later, but for the time being here is a quick run-through of the most recurrent scams involving motor insurance here in the UK.

 

 

Crash-for-cash – For those not au fait with the practice, ‘crash for cash’ describes the unlawful practice of criminals setting out to intentionally stage a car accident with the prospect of subsequently pursuing a fraudulent motor insurance claim on the back of it.

Typically the perpetrator will endeavour to ensure that they’re the unwitting ‘victim’ of a rear-end shunt by cynically hitting the brakes, forcing the innocent driver behind to make unavoidable contact with the protagonist’s vehicle. As the law stands, the driver of the following car is held legally responsible in such instances.

Although the police are increasingly aware of such scams these days, it’s still difficult to establish that such a coming together of vehicles was in fact the fault of the driver in front; and with that in mind the police urge drivers to be especially vigilant when it comes to vehicles being driven particularly slowly in front of you, or slowing down significantly whilst not deploying their brake lights – acknowledged as a common precursor by the authorities.

 

Fake whiplash claims – Britain is now officially identified as the ‘whiplash capital of Europe’ which is of course, not an accolade to be proud of. Hence why the government is putting the finishing touches to plans to hamper the illicit causes of those seeking to defraud insurers with fake whiplash claims in the foreseeable future by clamping down on personal injury claims management firms and ramping up the existing small claims limit to deter would-be scammers out there.

News of this has been broadly welcomed by insurers, not least because in most cases minor whiplash compensation account for over 90% of motor-related claims. That said, one of the biggest problems is proving/disproving fraudulent whiplash claims full stop, which explains the on-going fight all parties concerned have on their hands.

 

Flash-for-cash – Following similar lines to ‘crash for cash’, the premise of ‘flash for cash’ is the setting up of another elaborate scam based on a deliberately carried out collision which is in no way whatsoever, an ‘accident’.

Put simply a fraudulent motorist will proceed to flash their car lights in a cynical bid to instruct another driver that it’s OK for them to pull out of a junction, prior to intentionally colliding with them when they do. The law of the road is that the car emerging from a junction and joining a main road is at fault for any subsequent coming together of parties.

Cue the scammer then making a fake insurance claim against the victim’s motor policy, usually involving a personal injury claim and exaggerated vehicle repair bill. This type of fraud is more normally associated with organised gangs who make a habit of targeting vulnerable drivers or commercial vehicles, based on the underlying fact that these hapless victims of the crime are less likely to challenge liability.

 

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Fake car theft – This is a more old-school approach to trying to dupe motor insurance companies, the tried and tested concept being to either A) set fire to B) drive into a lake or C) add your own end to a car’s life; with the express intention of (once the dastardly deed is done) then calling an insurer to say that their car has been stolen. The police will be notified and arrive on the scene to carry out enquiries and kick-start a potential claims process. The con might even be carried out by a third party on behalf of the criminally-minded owner of the vehicle.

 

Phantom hit and run – The gist of this example of motor insurance fraud centres around a driver contacting their insurance provider to report that they’ve been a victim of a hit and run collision; claiming that the guilty party left the scene of the crime immediately after the collision took place, which conveniently exonerates this ‘phantom menace’ of any liability.

The reality of such fabricated matters is that the claimant has actually gone to the trouble of writing off their own vehicle (one way or another) so as to pursue what the insurer is led to believe is a legit claim for damages. Of course most insurers are wise to these fraudulent advances nowadays and seek to challenge the facts surrounding the incident from the outset.

 

Application fraud – With car insurance premiums on the rise once more, the temptation to lie about personal details on an application form is all the more apparent, as certain individuals attempt to go to unlawful lengths in order to minimise what they’re quoted. Although not as out-and-out criminally-minded as some of the aforementioned ploys, application fraud is nevertheless an illegal activity which authorities are well aware of and keep tabs on.

Among the most common (false) claims are the submitting of wrong birth dates (with a view to appearing older) and neglecting to mention ALL endorsements on their license (so as to afford themselves cheaper premiums). This is without question a fool’s game, as the resultant (and factually inaccurate) insurance cover isn’t worth the paper it’s written on and can be invalidated with little notice.

 

Ghost passengers – Less spooky, more contrived and focused on hoodwinking car insurance providers once again, this rouse involves effectively pretending that there were more occupants travelling in the car than there actually were, so as to increase the number of personal injury claims lodged following an accident.

Whether or not the traffic accident was a legitimate one or staged, the one assurance is that none of the claimed passengers will actually exist. This inescapable fact won’t stop the unscrupulous motorist in their tracks though as they try to defraud an insurer out of additional earnings.

 

Fronting – This trick is based on lies rather like application fraud, however differs in as much as it brings another player into the equation. Again aimed to bring the cost of premiums down, a driver pretends to be someone else so as to obtain the policy in the first instance, a path chosen to venture down so as to side-step higher premium quotes or potentially to circumvent a driving endorsement of one kind or another.

 

No insurance – Arguably the most simplistic form of universally recognised motoring fraud, failing to arrange any insurance cover whatsoever is a risk an increasing number of drivers are willing to take as premiums climb. In recent years over half a million motorists have been caught driving without insurance here in the UK, which goes to prove that a significant volume of people believe this to be acceptable practice.

The thing is should the driver be involved in a road traffic accident whilst driving without a car insurance policy then innocent motorists might well find themselves in a sticky situation should they look to pursue compensation for subsequent damage or injury.

Experts advise those caught up in an accident to be cautious of drivers who are adamant that they don’t wish to get their insurer involved in the process which follows an incident, as this could easily be a sign that they’re uninsured. Even in the event of them brandishing a valid-looking insurance document it’s worth being on your mettle as this could well turn out to be fraudulent.

The bottom line is that motor insurers should ALWAYS be contacted in the aftermath of an accident, irrespective of how minor the collision is, and should you have reservations about the other driver then it’s best to speak with the police at your first opportunity.

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